Welcome And Guest Introduction

Intro & Outro 0:00

Welcome to Tennessee on Supply Chain Management, where we unpack the drivers shaping today's global supply chains. From innovative ideas to real-world solutions, each episode brings you insights from the leaders charting the course for our discipline. Now here are your hosts.

Ted Stank 0:19

Hey everybody, and welcome to Tennessee on Supply Chain Management Podcast. This is season four, episode 10. Quite unbelievable to me that we've had that many episodes. I feel like Seinfeld. What are we going to talk about next, you know? My name's Ted Stank. I'm one of your co-hosts. Um, my typical co-host, Tom Goldsby, is not able to be with us today because he's got some other duty teaching one of our executive programs. So I'm I'm joined by my favorite fill-in partner, Lance Saunders.

Lance Saunders 0:47

Lance How's it going? And you talked about Seinfeld, and I'm really good at talking about nothing.

Ted Stank 0:53

So I usually think most of the time you're talking about nothing. That's how much I pay taxes. Or UT Sports.

Heather Kettelhohn 1:00

I was hoping we weren't going to talk about muffin stumps, if you guys remember that episode.

Ted Stank 1:06

So the third person with us today is our guest for today, Heather Kettlehone, Executive Director of Global Supply Chain Planning and Logistics for Cummins. Heather, welcome.

Heather Kettelhohn 1:14

Thank you. Thanks for having me.

Ted Stank 1:16

Oh, it's great to have you. So we're all here today at our summer meeting of our Executive Advisory Board for the Global Supply Chain Institute. Heather addressed that group this morning and talked about her affinity for the word transformation in supply chain. I'll let her address that comment later on.

Measuring Disruption And Global Pressure

Ted Stank 1:33

But as typical, let's kick off the few current events that are going on that that just I think point out the continued volatility of the world that we live in in the supply chain. I showed Heather this morning a graphic from the Federal Reserve that tracks global supply chain pressure index. It tries to track all different things that are happening in the world that create disruption in the supply chain. Was it 10 pages long? Well, no, it's just one of those graphs that the Fed does. It started they started tracking it in 1997, and they do like standard deviation from the mean. And for the better part of 10 years, it tracks right along the mean, you know, a little bit blips up and down. And then starting in 2016-17 time range, it starts varying wildly from the What happened in 2016? This is not a political comment, okay? This is just looking at the facts. It was the first Trump administration. And so many of the policies that the Trump administration has brought in, and I'm not commenting good or bad, have brought disruption to the supply chain. You know, we think about tariffs and you think about some of the visa issues we've had. Then COVID, of course, entered the scene and there was a huge swing during COVID. It started to normalize a little bit, but you know, we've had major swings again.

Heather Kettelhohn 2:53

I will tell you that graph, there's a lot of good reasons to come here, but that graph alone was worth the trip because it puts in numbers and it quantifies the things I've been trying to explain to people. So thank you for sharing that.

Ted Stank 3:04

Right. I mean, I think that for probably the better part of 30 years, we had some major, you know, events, black swan events that would happen. You know, you think about 9-11 and you think about the financial crash, but they were all, what, almost 10 years apart, and the supply chain had time to adjust. And so the supply chain was a relatively, I won't say predictable, but it was it was smoother. Trevor Burrus, Jr.

Lance Saunders 3:30

Well, we had 30 years of relative stability, and that conditions us good and bad in a lot of ways in supply chain. You know, Heather, you were talking about lean earlier.

Heather Kettelhohn 3:40

That doesn't work anymore. Yeah, exactly.

Ted Stank 3:42

I was gonna say the same thing, Lance. You know, so we are all gonna get lean and we're gonna drive all the waste out of the system and all the inventory out of the system, and that's fine if there's not tariffs and global panthropics.

Heather Kettelhohn 3:55

That worked well during COVID. Yeah, exactly. It's a conversation I've had a lot with leaders, especially in the automotive industry or the industrial. We are designed and still set up for a lean supply chain. The customer issues you an EDI, that exact bill of materials explodes and goes to the suppliers, and there's no manipulation in there, there's no fluff in there, and that doesn't work today.

Ted Stank 4:13

Yeah, yeah. You know, and we're not every other day, the Straits of Hormuz are open. No, they're not open. The Red Sea is open, and we've resumed passage through the Red Sea. Oh well, the Houthi rebels have blown up a Saudi base, and now the Red Sea's questionable again. Heather, you mentioned that a number of carriers have pulled out of some of the trade zones, trade lines.

Heather Kettelhohn 4:36

Yeah, we've had um India carriers in India Ocean carriers have pulled out as similar to when they responded in COVID due to profitability. They're re-looking at their routing, they're looking at the changes in global trade flows, I'm assuming, based on some of the tariffs and things, and saying we need to re-optimize our routes. And again, our routes were stabilized and we knew what to expect, and we just can't expect that anymore. So that's been for us, we have a lot of suppliers that are incredibly disruptive over the last four weeks.

Ted Stank 5:04

Yeah, yeah. And and I think we were talking earlier too. It's not like you know, the United States is is not a net exporter of petroleum from the Persian Gulf, but petroleum is a global product. It's impacted cost-wise, certainly, by the global marketplace. And there's other products that come out of the Persian Gulf as well. Um, you had mentioned things like some scarce metals, titanium, things like that.

Heather Kettelhohn 5:29

Yeah, carbon tungsten, things that we you make use to make our tooling, a hard and those are short in supply. It's interesting because when the board asks, they want to know what containers do we put through the Middle East. Well, we don't actually put a lot of freight through the Middle East. There's some. But giving them that picture and answering their question directly actually doesn't explain the magnitude of the disruption. So you feel the need to add on. We only move a small volume of freight in and out of the Middle East, but here's all the the add-on or the knock-on effects of what's happening there.

Lance Saunders 5:56

Aaron Powell Well, just because you're not moving doesn't mean you're not affected by those moving through there, because it all cascades through the supply chain, right?

Heather Kettelhohn 6:03

It does, exactly. So when you're six layers deep from some of those, it's hard to see exactly where that's gonna pop up.

Ted Stank 6:10

Yeah. Yeah. I mean, if there were no other lessons from COVID, no one was insulated from the impacts of COVID in China manufacturing because somewhere up those six layers you you were gonna have an impact. I I was amazed during uh you know the early days of the Russia-Ukraine war to learn about some of the the major percentages of global supply that come from Ukraine and Russia. I I I didn't know that. It was uh it was a kind of eye-opening to me.

Heather Kettelhohn 6:35

Yeah, I don't think many people realize how much fertilizer starts in the Middle East, right?

Ted Stank 6:40

Yeah. It's crazy.

Heather Kettelhohn 6:41

Helium. Whoever thought we'd have to worry about helium or things like that.

Ted Stank 6:44

Yeah. We have volatility in the domestic economy as well.

Lance Saunders 6:50

By the way, in Tennessee we call it volatility.

Ted Stank 6:53

Volatility. Yeah. Did anybody know that our area code 865? You know it. Yeah. 865 is V O L.

Heather Kettelhohn 7:02

Really?

Ted Stank 7:02

Yes. How about that?

Heather Kettelhohn 7:04

Second little tidbit that's worth it if I am a trivia fan.

Ted Stank 7:07

So if that ever comes up. Exactly right. Exactly right. Now everybody on our podcast knows that.

Lance Saunders 7:12

When I was a kid, they gave my parents the option to stay in 423 or go in. We forced them to go 865. Is that right? Yeah, we want a VOL number. Yeah.

Ted Stank 7:21

But the jobs report that just came out recently showed that all up until recently we've been having expansion of jobs. The recent jobs report showed that um we actually lost jobs. I just read that 640 food manufacturing jobs in Tennessee were lost just this week. So a lot of volatility there. Um inflation just came out and remained relatively stable, actually a small dip. But I mean, I think most of us that are out shopping at grocery stores or getting gas can tell you that I'm not sure what the statistics say, but it sure doesn't feel like inflation's stable but high. Yeah.

Lance Saunders 7:56

Stable but high and then daily, right? With the gas, you know, it's just like today it's we're going the right direction, it goes down 30 cents, and then the next day looks like we're not going to have, you know, the Iran conflict and it goes back up 35 cents. Mm-hmm.

Ted Stank 8:13

So all of which to say that if you're in supply chain management, I think more so than at any time since I've been working in this field, which is now 36 years, other parts of the organization are aware of the challenges we're dealing with. I don't think they understand the things we need to do that might increase cost to help us deal with it, but they're at least aware of the volatility of the world that the supply chain manager lives in. And so that theme, I think, is something that we want to talk to Heather

Lean Breaks Under Constant Shocks

Ted Stank 8:42

about. Heather, you've just been involved in quite a long implementation process for a new software package for planning. You gave a great talk to the advisory board this morning about the fallacy of the word transformation. I'd love to hear your thoughts on that. First of all, about the journey you've been on, and then you know, your thoughts about transformation and to really kind of take that into a a conversation about people and leadership.

Heather Kettelhohn 9:08

Sure. So I'm going to caveat it by saying I love change. I love fixing broken things. I love a challenge. It's why I got into supply chain. I didn't study supply chain, I studied biochemistry. I ended up here because it was actually more challenging than the biochemistry and the thermodynamics and the stuff that I was trying to fix. So I I love supply chain, I love change. The transformation is the part that I'm struggling with because for 30 years we've been transforming. Things have changed, but it's these big events that are supposed to transform. And you come out the other side, and I wouldn't say we're transformed. There's I used the analogy this morning of a caterpillar becoming a butterfly. And the reality is we've gone through a major implementation, two years in the making. We went live, that's the goal, but we're not transformed. We still have two more years of work to do. I shared a statistic that we, you know, we've gone live with this software and yet we're three or four versions behind already. While we were building it, we've already fallen behind. And so is it another transformation? And do we talk about it in those terms? Or we do do we just talk about it as the world is changing and we need to just keep up and really not talk about it at all because it is the state of play in supply chain and in the world.

Ted Stank 10:18

Aaron Powell Yeah. I mean, transformation, the word itself infers a s a finite start and end, right? Right. You know, so here's the current state, we're gonna do all these things, and we're gonna get to this as-is point or to be point rather in the future. And we're done. And we're done. And we walk away.

Lance Saunders 10:34

And I thought another good point that came out of that discussion was just the word transformation, also in general, makes us think that, you know, something is wrong, and on the other side, it's gonna be fixed. Yes. And so you mentioned how, you know, you've made this really concentrated effort to, you know, they get to the end and they don't maybe see that butterfly and they feel let down. And you've made a very conscious effort to be like, hey guys, let's recognize we have moved forward, but we still have work to do. And I I thought that was very insightful.

Heather Kettelhohn 11:05

And we'll always have work to do. There's no end to this, especially. I mean, things you still evolve and change. I would say they're evolving and changing more quickly now because of technology, because of the need to do it. And so there there is no end in sight, and that's okay, but it's not okay when you message to people that they're going to reach the end and they go at a pace that can't be sustained. And so we need to think about continuous improvement and how we pace ourselves without exhausting our people, without leaving them feel disappointed, and knowing that this is a marathon.

Ted Stank 11:36

Yeah. I think that's really the message is that it's a journey that will never end. It's just, you know, it's a continuing journey of continuous improvement. I remember being in a some kind of science class, maybe a math class in high school, and they said that, you know, if you keep having the distance between yourself and that wall right there, you'll never get there. Right.

Heather Kettelhohn 11:57

That's a great analogy. Yep.

Ted Stank 11:59

You'll get close, you'll get closer, you'll get better, but you're never going to get there. And then in the world we're living in today, not only are we trying to get to that wall, but the wall keeps moving.

Heather Kettelhohn 12:09

Mm-hmm. Yeah, for sure. The wall keeps moving. And we staffed up to do this with one set of supply chain environments, and and that's not the environment we're living in today. We talked about we've had a lot of volatility over the last 10 years. The last 10 months have been really rough when you're in supply chain too. And so, how do we balance out transforming and still keeping the business afloat? People use the analogy of, you know, flying the airplane and changing the the wings or something, but it's tough. It's a tough balance to get right. We can't not change because we will fall farther behind, but we also can't let the business fail in supply chain. It's it's too critical.

Lance Saunders 12:46

And you, you know, you talked a lot about, and I I I think this was also really insightful in your position. You know, you have a lot of people that are saying this is where we need to go above you, that maybe don't know all the operational realities of the supply chain. They know we do more, things like that. And you've got to sell them that, you know, we are gonna have benefits, but you also need to keep, you know, expectations realistic. Yeah. And and that's a balancing act that you know I thought was really interesting when when we spoke in that and and the as we're at the same time, you're trying to sell investment on ROI, right?

Heather Kettelhohn 13:19

This is exactly it. I think sometimes the ROI on the technology itself is tough to sell to get the investment. And and you know, you want return in 18 months. The reality is these programs take years. Even after you go live, you've still got work to do to improve. And so we've got to figure out how to change the conversation around an ROI conversation to a keeping up. How do we retain customers? How do we satisfy customers if we need to assign an ROI to that? Because of the the pure mechanics of we're gonna save premium freight, we're gonna reduce inventory, that doesn't cut it. And that's actually not the real value. It's the satisfying customers, is being able to maintain your share of market, provide the same service that you expect. I said I buy a $20 sweater and I immediately have tracking on that. How do we do that with our customers when we're a big industrial company?

Lance Saunders 14:07

That's why, you know, I have if any of my former students are listening to this, they know when I'm in class, I'm like, if you don't know the answer in supply chain, we lose track of this a whole lot. But if you just say customer value, I'm gonna have a hard time arguing that you're wrong. Because at the end of the day, I think you're right, you know, that we have to start there. And if we but it's so easy to lose focus because of all the other things we're doing.

Heather Kettelhohn 14:29

Yeah. For sure.

Ted Stank 14:31

You said you've been through about a two and a half year implementation for a new planning system. What are some of the learnings that you've gained over the last two and a half years that that worked well, things you do differently?

Heather Kettelhohn 14:44

Yeah, so I think we did a lot of work up front. We did we set some ground rules, right, on on what we were gonna look for in an implementation partner. We'd had some struggles before. We did a real close look at at where we were starting and what our capabilities were and what we wanted, and we defined some parameters. We're gonna go with somebody who's got proven technology. We're not gonna build ourselves. That might be right for some companies, but it's not right for us. Not only are they gonna have proven technology, but it's gonna be in our niche space that we're looking for. We were looking for service parts. So not just any planning, but it needs to be proven capability because it's kind of niche. There aren't a lot of providers out there actually. So that helped us narrow in. And then we got really clear about our requirements and what we were gonna do. We were going to buy, not build. We were going to configure, not customize, and these are the things that we need to have. And so we spent a good portion of that early time defining our requirements and then working with partners to test out whether or not they could meet those requirements so we knew what we were getting, kind of kicking the tires beforehand.

Lance Saunders 15:48

So, how did you manage I think one of the most common things we hear when we go talk to companies, and you said it's niche, but there are other companies that do, you know, service partners. Sure. Yes. How do you guard against when you're going through this, the well, we're different mentality that almost every company has?

Heather Kettelhohn 16:05

Yeah, I would say we were not different at all. The only thing I wanted was a company that specifically did aftermarket planning, but I would say we're we're really not that different from anybody else that does it. I don't think there's much that's special about supply chain at the end of the day. I think we add and subtract, do a little multiplication once in a while, but it's supply chain is supply chain. I've been in chemicals, I've been in industrials. The concepts are the same. And so I didn't want us to fall into the trap of we're special and we recognize that we're not special, which is why we said we're gonna minimize the customization and we really should be able to configure a little bit, but take it out of the box.

Ted Stank 16:40

I think that's a big realization because I think so many companies get in trouble because they focus on the differences instead of the similarities, and before you know it, you've got a completely customized solution. Exactly. But no one else is used, and so you have no idea how it's gonna work when you take it out of the box. Right.

Heather Kettelhohn 16:54

And that's not to say so that meant we had to do some transformation, right? It means we need to do some process changes and things. That's okay because we're trying to get to a best in class or an industry standard. Doesn't mean we're gonna completely redo everything, redo all of our processes, but it's okay to make some changes to our processes to fit the software.

Lance Saunders 17:13

Yeah, and I think what you're really speaking to, I think is critical with any kind of tool that you're doing is the tool has to support process. And if you get into, you know, you're gonna use this change and this transformation, for lack of a better word, to drive process, I think that's where a lot of companies get in trouble. And so working on those processes before you, you know, because if I just put the software in, I have bad process. Well, I'm just logging in. I'm just digitizing a bad process.

Heather Kettelhohn 17:41

For us, a little bit of a chicken and an egg because we were on a very old system, we didn't have some capabilities we needed to support some processes. And I found this as well when we did some improvement work in in other parts of our planning or in other parts of the organization, you kind of need to

Why Transformation Feels Like A Myth

Heather Kettelhohn 17:58

iterate. So we've put in some better tools, it gives us some better data. Now we don't have a forum to make those decisions because we didn't have that data before. So what's the IBP process or something that needs to go along to support that? Well, now we've got the IBP process, now we can make more robust decisions. What organization do we need? Now back to the tool to improve it. So I think that's where we're at now as we're starting to iterate on some of that.

Lance Saunders 18:20

That's so critical, right? You know, you have a lot of companies that are digitizing and you have these AI tools that are going to sit on top of planning and do all this. And I I think if I just put AI on top of a planning process that's making bad decisions, I can tell you. Yeah. Yeah. I can tell you where you're going to end up, right? And so I think that's just so insightful for anyone is that you know you have to look at the planning process first for the tool to support, not the other way around.

Heather Kettelhohn 18:49

That's exactly where we're at. We've gotten a lot of pressure. What are you doing with AI? What are you doing with AI? We're just now putting our first bits of AI in, but it's because we really had to define standard processes and decisions so that we trust the output of the AI. We trust that it'll be good.

Ted Stank 19:10

So, I mean, uh the standard thing of change we've always learned is people process technology, right? Um, so we've talked process, we've talked technology. Let's touch on people.

Heather Kettelhohn 19:20

Yeah.

Ted Stank 19:21

Because at the end of the day, and I've heard so many senior leaders say it, Daryl Edwards on our faculty, used to be chief operating officer. He said, At the end of the day, supply chain is still a people business. Usually, I think in most companies, they find 70% of the human labor in an organization work in a supply chain related function, especially if you're a manufacturing company. Talk to us about the people challenges. Um you talked earlier about, you know, your team's burnout when, you know, okay, now we're live.

Heather Kettelhohn 19:48

Yeah, I think there was some initial disappointment. Um, and I hope they don't mind me saying that, but you know, we thought we were going to get to this go live and things were gonna be great, and we were gonna take this thing out of the box, and we've got this Ferrari. That's what we kept talking about. It's not a Ferrari. That's okay. We didn't want a Ferrari, we wouldn't have been able to drive it. Yeah. We would have driven it straight into the tree. So we got what we got, and but that means that there's work to do to get it to be that Ferrari. And so that's sort of frustrating or disappointing to people or exhausting a little bit. So we've taken a break. We went live in January and it's July now, and we're regrouping and saying, okay, we did the right thing. We protected the business. We went live with something that we could handle. And now we have this huge runway and of opportunity in front of us that we didn't before. And and how do we re-energize to take advantage of that runway?

Lance Saunders 20:37

You know, Heather, you may be think about that. I don't know if you watch The Office, but you guys are at the point where you have this new tool, but if you just use it without really thinking about how to you're gonna drive it straight into the lake. Yes.

Heather Kettelhohn 20:49

Yeah, that's where we're at.

Lance Saunders 20:51

Yeah.

Ted Stank 20:51

That was in The Office.

Lance Saunders 20:54

Okay, boomer.

Ted Stank 20:55

I've watched The Office. So we've mentioned Seinfeld, we've watched The Office. Yeah. We need Ted Lasso, some Ted Lasso. For sure. Yeah. Believe. Goldfish. Do people have to believe? I think that's what it is.

Heather Kettelhohn 21:07

Goldfish. Noted. So I think that's been one of the challenges. The other challenge is always adoption, right? That's what it comes down to. People need to adopt the tool. And a couple of challenges that I think we have there are do we make different decisions from this tool? Do we trust this tool? And I call it the emotional support XL, because that is the tool of all supply chain, the most common tool of supply chain. And I've used this XL forever, and I trust it, and I've designed it exactly the way I want it. So there's some trust in it, and there's some, you know, pride in it, and it's mine. And you're asking me to give it up and do something that I maybe didn't have as much input in as I would like, and it maybe doesn't look the way I like, and it takes me longer to do the things I want to do because I knew exactly in my XL how to go get it, and I need to poke around a little bit here. It's especially challenging in today's environment to take the extra 15 seconds, 20 seconds, 30 seconds to learn how to. To work differently because the pressure's on right now.

Lance Saunders 22:02

You know, one of the big metrics that a lot of companies are in a similar position of you are looking at as they go, This is the touchless planning. And I've noticed that a lot of companies don't get the results they want right away because they lose track, Ted, of just what you're talking about. You know, great technology, but at the end of the day, you have a person that's sitting there making a decision. And that people side and the behavioral side, you know, we've done a lot of research and when we first started and supply chain planning became, you know, focus for a lot of research Ted and I were doing, we thought, oh, this is all gonna just be technical, you know, we're making bad decisions because the algorithms and the formulas and stuff behind it are wrong. And we quickly found out how wrong we were. That people side is just as important or more than probably because the software is there. Yeah. They can make good decisions.

Ted Stank 22:54

I wonder, I wonder in I'm not talking your specific case, but I wonder in so many of these, particularly planning implementations, how many 30-year planners are doing their planning on Excel spreadsheets and then entering their output into the new system. More than we'd like. Yeah. Yeah. More than we like. You know, it a hundred million years ago when I worked in the hospital diagnostics business, we used to sell these big multimillion dollar blood chemistry analyzers. And this was in the late 80s. And so we were starting to tie computerization with some of the outputs, with pharmacokinetics and things like that. And so we would sell the big analyzer and we'd give them a desktop computer and monitor that went with it and was supposed to take the data. And you go back into that account a month later, and the computer part of it was back in a box over in the corner of the lab. Because no one had trained them on how to use it. It was a new process, new technology. And, you know, so that was an antiquated example, but I'm sure it happens.

Heather Kettelhohn 23:53

I had one like that. We had put SAP and we integrated a company. This was a decade and a half ago. We integrated a company, we'd put our SAP system in there to do drumming line, packaging line, scheduling. And I went down to visit the site and uh guy had his notebook back out. He was not using that computer. He did it in a spiral notebook, and he'd been doing it that way for 30 years. He had his notebooks on the shelf, and nobody was gonna change that.

Ted Stank 24:16

Yeah.

Heather Kettelhohn 24:16

Yeah.

Ted Stank 24:17

So how do you address that? How do you address that behavioral change that's required to use the technology that you've labored so much, invested so much to implement?

Heather Kettelhohn 24:25

I think a first thing that you need to do is understand why. There may be some valid reasons. When I look at some things in this case, and when I look at, you know, I've done several of these major implementations. Sometimes there are valid reasons. We designed it and it doesn't have all the data they need. We missed something in the requirement. And that's okay. We just need to correct it. And it's important that we do that early in the program rather than blaming people for it. We really need to sit down and have the conversation about did we miss something and and address those to make the user adoption higher.

Lance Saunders 24:59

You mean people like transparency?

Heather Kettelhohn 25:01

Yes, people like. People like transparency. They like you to take accountability and to say, you're right, we missed that filter, we missed that graph that you need to do your job. But you need to be discerning about that, right? It's not everything. The second piece that we need to do is as leaders, we need to ask different questions of the teams, questions that they can get out of the new tool, not out of their old tool. And so we put this new tool in place, we put these new processes in place so that we drive different and better decisions. So force them to get into the don't ask the same old questions then. Ask new questions where they guys are there.

Ted Stank 25:34

Doug Gray of Train, who is a previous guest on here, he mentioned that this morning. Like he's looking at a screen and he's like, Well, what can you tell me about this, this, and this? And right.

Heather Kettelhohn 25:43

And then the third one, unfortunately, sometimes it really is just a comfort level and you gotta sit down and decide when you're gonna draw the line and really start to force the issue, and it becomes a performance issue if people can't adopt. But but you gotta address those first things first, and then then you go on to the more draconian measures.

Lance Saunders 25:59

How important are getting some quick wins?

Heather Kettelhohn 26:02

Really important. Really important. One of the reflections I've had over the last few weeks is we we stopped celebrating the wins. Shortly after go live, we stopped celebrating the wins, but

Selling ROI When The Real Goal

Heather Kettelhohn 26:11

we're still early in this journey and we need to find a way to celebrate again. And celebrate not just the wins, but the people that are having those wins that are the early adopters, that are the change champions that are getting into the system.

Ted Stank 26:25

So my take is then that there are varying capabilities that folks have in dealing with this kind of change. Let's not call it transformation change. What do those capabilities look like? How would you characterize the capabilities that characterize somebody who's going to thrive in this environment?

Heather Kettelhohn 26:43

I think people that really thrive in this new environment is a systems way of thinking. I understand what this system is doing because that inherently then gives you trust in the system and a desire to use it. So kind of that systems thinking, the ability to look at the system and say, I trust the output. Or there's still the human factor that we talked about in supply chain. There's a reason it's not machines doing this. And you need to know when do I, as the planner or the logistics provider or the whatever your role is, when do I know something that the machine doesn't? And so I need to go back and change the inputs to get the outputs I want, or I need to make a different decision than the machine did. That's the value that we bring.

Lance Saunders 27:29

And it sounds like you and this is you know not shocking that this is important, but I we probably get so caught up that we don't do this. Is it sounds like you're actually going out and you know talking to the people they're implementing this to, you know, understand how to bar another Nani's uh sitcom reference to actually go ask them, like, how you doing?

Heather Kettelhohn 27:49

Yes, exactly. It's important.

Lance Saunders 27:52

I don't know that reference. Are you serious? I don't. What is it? As friends.

Heather Kettelhohn 27:57

Friends.

Ted Stank 27:58

I mean Joey from Friends. I never watched Friends. I disliked it severely. I'm for the first time in my life, I'm a little I'm speechless for once, Ted. Never liked it. Never liked it. Let's talk about MASH or cheers, okay?

Heather Kettelhohn 28:17

So so yeah, I think that's important. The other thing that comes to mind, I'm gonna get us back on track here. That's a rough transition. I I just mentioned when people know something that the machine doesn't. One of our first forays into kind of automation and wasn't called AI then, but it was almost 15 years ago. We looked at production scheduling, and we had people production scheduling in Excel, a favorite tool, spending most of their day creating production schedules, real complicated schedules. And one of the first things that we tried to do was automate some of that. So when you make a schedule, here's all the things you need to know. This is in the chemical industry. This batch can't run after that. There need to be two flush batches before you do that. Get that all down on paper. And we actually were successful, but only with a certain group of production schedulers. We could automate the schedule. And instead of one production scheduler working on one line, they could now look at six. But what they needed to be able to discern is what did I put into the machine? What do I now know that the machine doesn't like this customer just had a shutdown and I don't want to run this stuff anymore and it's happened real time. And so some people could understand that and had that critical thinking and that systems thinking, and some people struggle with that.

Lance Saunders 29:29

I mean, as far Ted, you know, one of the projects that we've been working on in our advanced supply chain collaborative is the role of the planner in general. I think a lot of companies historically, COVID has changed this, but a lot of companies called planning, it was really just production scheduling. And that role of the planner and the competencies they need have evolved so much. And I think that's just such a great analogy, is as this evolves, you have to take stock of what those skill sets are. Yeah. Because they're they're they're moving.

Ted Stank 30:00

Aaron Powell Well, we've mentioned it before. I I don't think 10 years ago we had the realization that planning is is really the first frontier of great supply chain management.

Heather Kettelhohn 30:11

Aaron Ross Powell We are the heartbeat of the supply chain.

Ted Stank 30:13

If we could fix planning just a little bit, think about the operational implications downstream of customer service, cost, everything.

Lance Saunders 30:21

Trevor Burrus, Jr. But think, I mean, just how ironic it is that most organizations, I know Cumming does, you have this legacy logistics group and you have this big sourcing group, and you know, we're an operations manufacturing company, we do that. And the fourth plant source make deliver was kind of forgotten in most companies. Yeah. And you're right, it's the one that connects everything.

Ted Stank 30:38

Trevor Burrus, Jr.: Well, supply chain is about doing, right? Most people get into supply chain because we're doers. And so we want to jump in and do. Whereas planning is like, wait a second, let's kind of figure out what we're doing.

Heather Kettelhohn 30:49

And it frustrates other parts of the supply chain.

Ted Stank 30:51

Yeah, right.

Heather Kettelhohn 30:52

We don't have a minute to think about this. We don't have a moment to make a plan.

Ted Stank 30:55

We need to find out, let alone your sales and marketing teams, right?

Heather Kettelhohn 30:58

Don't even get started.

Ted Stank 30:59

Build it all. We could sell it if you build it, right?

Heather Kettelhohn 31:02

Yes. Clearly you've been in industry many times.

Ted Stank 31:04

Stag it high and let it fly.

Heather Kettelhohn 31:08

Yes, exactly.

Ted Stank 31:09

Yeah. Really briefly, because I know we're reaching kind of the end. Brian's given us the high sign here, the ugly two letters of AI. I know we could probably spend the whole time talking about it, and we've had guests on that we've talked about AI. How do you see AI playing into this in terms of potential improvements and challenges, roadblocks in the future for your teams?

Heather Kettelhohn 31:31

People get really nervous about AI. What I think will happen, what I hope will happen is we are too busy right now in supply chain. We can't keep up. When I look at the hundreds of thousands of SKUs that we need to manage, we can't do it. I don't need to take away jobs. What I need to do is take away some of the busy work. Let the machine do what the machine can do and let the people do what the people can do. So my hope is that AI takes away some of that work that none of us want to do anyway and allows our teams to really function at a higher and a different level. Takes some different capability, as we just talked about, but I think we can adapt. And the goal is to make sure that our organization adapts at the same pace as the technology.

Lance Saunders 32:09

I mean, people are a resource, right? Yeah. And you want your resources working on the most value-added things. And I'm also hopeful that AI takes away a lot of those monotonous, more non-value-added tasks and allows your people to actually look at the exceptions and improve and actually do that so they're not just doing busy work.

Heather Kettelhohn 32:28

Right. We talked about the exhaustion of transformation. Well, if I had people that were available, if AI could do the busy work and I have people that have more time, we can do more transformation. We can drive more results.

Ted Stank 32:38

Yeah. Yeah. I think that's the promise of AI. We hope we get there. There's certainly going to be missteps along the way. I I'm a big believer in the fact that the real applications of AI will bubble up from the bottom as our people get comfortable with using it and they're given guidelines on where to use it and how to use it, that they're going to find that it does free them up to spend the time on the more critical thinking human elements of the job. Trevor Burrus, Jr.

Heather Kettelhohn 33:04

That's exactly where ours are coming from. Ours are coming from our working teams and studies of where they spend their time and what could we automate for you?

Ted Stank 33:10

Yeah. Yeah. Excellent. Well, Heather, thank you so much for spending time with us again here. I think this was a great session.

Lance Saunders 33:16

Well, we'll say, you know, the last one of the day is this podcast has been Legend Dairy.

Heather Kettelhohn 33:23

Oh no, you lost me on that.

Lance Saunders 33:25

How I Met Your Mother.

Ted Stank 33:26

Another one. Yeah. I I'm aware of the show. I haven't watched it a whole lot.

Heather Kettelhohn 33:30

So we know Lance watches a lot of TV.

Ted Stank 33:31

Yeah, Lance tough.

Lance Saunders 33:33

Chad is going like, how did he get tenure?

Ted Stank 33:35

Yeah. I guess you were using AI a long time ago to free yourself up. Yeah.

Lance Saunders 33:41

I'm ahead of my time, Chad.

Ted Stank 33:42

That's what it is. Hey, uh a couple of uh administrative notes that I want to make before we break. We have uh some recruiting events coming up in September 21st, 22nd, and 23rd. We're taking registrations for early access recruiting night, the fall supply chain management career fair, which is on the 22nd, and the Supply Chain Management Technology Academy begins on September 22nd as well. You can learn more about this at gsci.utk.edu and follow gscii on LinkedIn. And you can pick this podcast up at your favorite podcast source. That's all we got. Thank you. See you next time, everybody. Heather, thanks again.

Intro & Outro 34:25

Lance, fill in Lance. You're always great. Thank you, Teddy. Thanks for listening to Teddy

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Intro & Outro 34:31

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